Munich Re to Cut as Many as 1,350 Jobs at Ergo Insurance Unit

Munich Re, the world’s biggest
reinsurer, will cut as many as 1,350 jobs at its Ergo
Versicherungsgruppe insurance unit to reduce costs by about 164
million euros ($201 million) a year.

Ergo’s management will discuss the measures, which are to
be implemented by the beginning of 2014, with employee
representatives, the Dusseldorf, Germany-based Munich Re
division said today in an e-mailed statement. Ergo employed
31,311 people in 2011, indicating the cuts represent 4.3 percent
of its workforce.

Munich Re, led by Chief Executive Officer Nikolaus von Bomhard, plans to more than triple profit to about 2.5 billion
euros this year. First quarter profit at the primary insurance
unit, which mostly consists of Ergo, rose to 145 million euros
from 53 million euros a year earlier, Munich Re said May 8.

Ergo will reorganize its five sales divisions into two with
“competitive size and unified structures,” the company said.
The insurer will seek to make the job losses “socially
acceptable,” Ergo said.

Ergo said the cuts will be split between as many as 700
fixed-contract positions in external service and as many as 650
jobs in internal service.